Revenue flat, earnings slide at Victorian Plumbing
Victorian Plumbing reported a 6% improvement in second-half revenue on Tuesday, with revenue for the full year “broadly flat” at £269.4m, compared to £268.8m in the 2021 financial year.
The AIM-traded bathroom retailer said in its full-year results that was still an increase of 78% over the pre-pandemic comparator in 2019.
Its gross profit margin increased in the second half to 45% from 44% in the first half, with gross profit for the year ended 30 September slipping 7% to £121m as the full-year gross profit margin slid to 45% from 49%.
Adjusted EBITDA came in at £19.5m, more than halving from £40.1m year-on-year, as the adjusted EBITDA margin tumbled to 7% from 15%.
The board described its balance sheet as “robust” and debt-free, with a closing net cash position of £45.5m, up from £32.7m.
Free cash flow totalled £14.3m, down from £32.6m, while operating cash conversion slipped to 73% from 81% in the 2021 financial period.
The company’s board proposed a maiden ordinary full-year dividend of 1.1p per share, and a special dividend of 1.7p per share, with a total cash distribution to shareholders of £9m.
Looking ahead, Victorian Plumbing said it had a “strong start” to the 2023 financial year with 10% revenue growth to date, while maintaining its second-half gross profit margin, and with lower marketing spend versus the comparative period last year.
The directors said they were “conscious” of the current macroeconomic conditions, and would continue to monitor consumer behaviour and tailor its pricing and marketing approach accordingly.
Victorian Plumbing said it was continuing to focus on its long-term goals, and was making “good progress” on all of its strategic growth areas.
Underpinned by its market share gains, the board said it was “confident” in the group’s future growth prospects.
“Following a tough first half of the financial year, we have returned to growth in the second half, increasing our market share and establishing our position as the UK's number one bathroom retailer,” said founder and chief executive officer Mark Radcliffe.
“Our distinctive brand and extensive choice of quality bathroom products - including quality own-brand ranges and an unrivalled suite of third-party options - remain compelling drivers in attracting consumers to Victorian Plumbing, whilst the strength of our supply chain and our strategic investment in inventory means that the majority of our products have high availability.
“As a highly cash-generative business with a strong balance sheet and growing momentum through 2022 and into 2023, we see the macro operating and economic environment as an opportunity to further strengthen our market position and we enter the new financial year as the UK's number one bathroom retailer with confidence and real excitement in our plans for further progress.”
At 0823 GMT, shares in Victorian Plumbing Group were down 1.32% at 67.1p.
Reporting by Josh White for Sharecast.com.